WIREDGOV

The Scottish Government will protect frontline services, despite having to wrestle with the first real terms cut in its budget since devolution, John Swinney said today.

Presenting the draft budget for 2010-2011, the Cabinet Secretary for Finance and Sustainable Growth stressed that the Government's approach has been to protect programmes that matter most to the people of Scotland.

These programmes are:

• spending on frontline public services, such as schools and hospitals
• on the economic recovery plan, including support for hard pressed businesses and action to protect jobs and employment
• those that protect households at a time of economic hardship

Today's budget shows the Scottish Government's Departmental Expenditure Limit Budget - the money over which it has direct control - will reduce in real terms by 0.9 per cent compared to this year.

This is a result of the £500 million cut in planned expenditure for 2010-11 imposed on Scotland by the UK Government, and accelerated capital expenditure.

Mr Swinney said:

"At a time when many businesses and families are facing the challenges brought by the recession, it is imperative for government to respond effectively and decisively to support them.

"We have had to face difficult choices about where to reduce planned spending next year. We will meet this challenge while continuing to work with our partners to achieve our priorities and protect programmes that matter most to the people of Scotland.

"Crucially that will mean protecting spending on frontline public services, such as schools and hospitals. It will mean ongoing investment in our economic recovery plan, including support for skills development and for hard pressed businesses; and on programmes that help protect households at a time of economic hardship."

Mr Swinney added that in order to deal with the £500 million cut:

• portfolios have been asked to bear down on their own Resource budgets in ways that do not impact on the government's priorities and our frontline services
• the Scottish Government Administration budget will be cut by £14 million in 2010-11
• local government will take their pro-rata share of the Chancellor's cuts. Scottish local authorities have indicated that they are prepared to manage within these reduced spending totals, and to approach the resultant challenges - which will be significant - in a spirit of partnership
• additional resource savings will be found by asking departments to reduce spending on a number of projects and programmes. These have been selected to minimise their impact on our immediate priorities and include giving up £20 million set aside next year to prepare for the introduction of a local income tax

The UK Budget published in April 2009 set out a reduction in the Scottish Government's 2010-11 DEL Resource budget of £392 million and a further reduction of £129 million to the Scottish Government's DEL Capital budget as a result of a cut the UK Government has made to the Department of Health's Capital baseline. The cuts that were announced in the Budget, offset by a small increase of £25 million in consequentials, mean that the departmental expenditure limit budget will in 2010-11 be reduced by £496 million compared to the limit set out in the Spending Review 2007 document.

The Scottish Government is facing a real terms cut in the budget in 2010/2011 compared to 2009-2010. The Departmental Expenditure Limit (DEL) budget for 2010-11 - Resource and Capital - is £177 million up in cash terms on the corresponding budget for 2009-10, but in real terms that is a reduction of 0.9 per cent or £268 million using the Treasury's published GDP deflator of 1.5 per cent for 2010-11. The government's spending power will therefore fall by 0.9 per cent compared to what it is this year.

Departmental Expenditure Limit is the funds available to departments through the operation of the Barnett Formula. Allocations within the Scottish Block Grant are determined by Scottish Ministers. DEL spending is discretionary.

Related Links